Monday, November 11, 2013

A London based asset management company Mondrian Investment Partners Ltd with its growth story and attractive dividend yield.

It has its stake in the industrial rubber hose manufacturer and exporter by about 62% in less than two months. Between Aug 2 and Sept 19 2013, it bought 5.02 million shares to raise its shareholding to almost 10%.

Other funds include iCapital.biz holds 320000 shares in the company.

The company will increase its gearing to finance up to 50% of an estimated rm35 million to rm38 million capex in 2013 so it can maintain its close to 10% dividend payout ratio. It is also likely to take out some short term borrowings to sustain its 90% to 100% payout ratio.

Its dividend yields have also been inching up ... from 4.26% in FY2010 to 4.65% in FY2011 and 5.97% in FY2012.

The company’s main products are rubber mandrel and extrusion type hoses, used for air, water, steam, oil, chemicals as well as F&B in industrial applications.

Its main market is the rubber hose replacement market. Currently (Nov 2013), air and waste hoses contribute most to its revenue (43%), followed by gas and welding (20%) and oil and gas (31%).